Open Labor Market Operations

I offer both a moral and a macroeconomic case for institutionalizing continuous public operations in labor markets analogous to continuous Fed operations in money markets. The macroeconomic case stems from prevailing wage and salary rates’ status as what I call ‘systemically important prices’ on a par with prevailing money rental – i.e., ‘interest’ – rates. The pervasive importance of these rates requires ongoing public action to confine fluctuation within a reasonably narrow band. The moral case sounds in the need to counteract the commodification of citizens in human rental markets, which is what ‘labor markets’ in the absence of collective citizen action amount to. A permanent ‘public option’ in the realm of labor-hiring will effectively constitute a ‘fallback’ collective self-employment option, the ‘self-pay’ and workplace standard conditions of which will become benchmarks economy-wide and render all labor effectively ‘free labor’ in the 19th century ‘labor republican’ sense of the phrase.